MR. FLEISCHER: Good afternoon and happy New Year to everybody.
The President began his day with an intelligence briefing, followed by
an FBI briefing. Then he had a series of policy briefings. And this
afternoon, the President will look forward to a Cabinet meeting where
the President will discuss with members of his Cabinet his agenda for
the year. The President is going to focus on economic growth, making
America a more compassionate country, and providing for the security of
our nation abroad and on the homefront.

And with that, I'm more than happy to take your questions. Helen.

Q At the earlier briefing, Ari, you said that the President
deplored the taking of innocent lives. Does that apply to all innocent
lives in the world? And I have a follow-up.

MR. FLEISCHER: I refer specifically to a horrible terrorist attack
on Tel Aviv that killed scores and wounded hundreds. And the
President, as he said in his statement yesterday, deplores in the
strongest terms the taking of those lives and the wounding of those
people, innocents in Israel.

MR. FLEISCHER: Helen, the question is how to protect Americans,
and our allies and friends --

Q They're not attacking you.

MR. FLEISCHER: -- from a country --

Q Have they laid the glove on you or on the United States, the
Iraqis, in 11 years?

MR. FLEISCHER: I guess you have forgotten about the Americans who
were killed in the first Gulf War as a result of Saddam Hussein's
aggression then.

Q Is this revenge, 11 years of revenge?

MR. FLEISCHER: Helen, I think you know very well that the
President's position is that he wants to avert war, and that the
President has asked the United Nations to go into Iraq to help with the
purpose of averting war.

Q Would the President attack innocent Iraqi lives?

MR. FLEISCHER: The President wants to make certain that he can
defend our country, defend our interests, defend the region, and make
certain that American lives are not lost.

Q And he thinks they are a threat to us?

MR. FLEISCHER: There is no question that the President thinks that
Iraq is a threat to the United States.

Q The Iraqi people?

MR. FLEISCHER: The Iraqi people are represented by their
government. If there was regime change, the Iraqi --

Q So they will be vulnerable?

MR. FLEISCHER: Actually, the President has made it very clear that
he has not dispute with the people of Iraq. That's why the American
policy remains a policy of regime change. There is no question the
people of Iraq --

Q That's a decision for them to make, isn't it? It's their
country.

MR. FLEISCHER: Helen, if you think that the people of Iraq are in
a position to dictate who their dictator is, I don't think that has
been what history has shown.

Q I think many countries don't have -- people don't have the
decision -- including us.

Q Without going into details, Senator McCain says that he
thinks that the President's economic plan should have some benefit for
the middle class. From what we've seen of it, there doesn't appear to
be much for the middle class, mainly geared toward higher-income
Americans. Can you give us any idea -- if you don't want to go into
details, give us an idea of what the percentage of the stimulus package
will go to middle class Americans?

MR. FLEISCHER: The President very much looks forward to traveling
to Chicago tomorrow to announce an economic growth plan for all
Americans. The President's plan will encourage consumer spending, it
will promote investment throughout our country and in the business
community and small business, and it will also help the unemployed.

Specifically, under the President's proposal to provide tax relief,
92 million taxpayers will receive, on average, a tax cut of $1,083 in
2003; 46 million married couples would receive average tax cuts of
$1,716; 34 million families with children would benefit from an average
tax cut of $1,473; and 13 million elderly taxpayers would receive an
average tax cut of $1,384. The final statistic I'm happy to give you
is a typical family of four with two earners making $39,000 in income
will receive a total of $1,100 in tax relief under the plan.

So the President's plan is a plan that helps all Americans. It
helps middle income Americans, it helps the economy get going and
growing again, and it's a plan the President looks forward to
discussing.

Q Are those figures from the plan that was passed last year or
the one --

MR. FLEISCHER: No, this is from the plan the President will
announce tomorrow.

Q These figures are for the one announced tomorrow.

MR. FLEISCHER: Correct.

Q What's the percentage of the amount of money, $600 billion or
whatever it is that's going to go to pay for tax cuts, what's the
percentage of that will go to middle class Americans?

MR. FLEISCHER: I'll try to have additional numbers tomorrow, Ron,
but as you can see from the numbers, it's focused at the majority of
American income taxpayers who are middle class.

Q Just to follow up, on the $600 billion, we're looking at,
according to the CBO numbers, I think, an expected deficit of $250
billion in fiscal year 2003. I understand the logic -- your logic
that these tax cuts will lead to growth and that will do away with the
budget deficits. But don't you have to couple that with spending
cuts? And how is the administration going to do that, given the
expense of homeland security and a possible war with Iraq?

MR. FLEISCHER: Well, the President's approach is that what creates
surpluses in our country and in our government's coffers is growth,
that without growth, there are deficits. In times of growth, we have
surpluses. And that's what history has shown. And so the current
deficit is caused as a result of the recession. We know the slowdown
began in the summer of 2000, and then we went into recession as an
economy in 2001. And we are now beginning to emerge from the
recession.

The President wants to make certain that -- the people who suffer
from the biggest deficits in our society are the people who don't have
a job -- and he wants to put a plan in place to help give a boost to
the economy, to give a boost to business investment, to give a boost to
American taxpayers so that more jobs are created so that people can go
about earning income and feeding their families.

That's where the President's focus is, and that's why this plan is
addressed to giving a short-term boost to the economy, helping the
unemployed, as well as putting the fundamentals in place for
longer-term sustainable growth. And that, in the President's judgment,
will help to return to an era of surpluses.

Q Right. And ultimately, you hope to not be in a deficit
situation down the road, presumably, right?

MR. FLEISCHER: Well, clearly, anything dealing with Iraq is such a
hypothetical, I'm not in a position to address what a potential cost
could or could not be. But regardless of any decisions that are made
on Iraq, the economy needs a boost. And that's why the President is
going to go to Chicago tomorrow, separate and apart from anything
dealing with Iraq, to announce a plan to give the economy a boost.

Q You also call for cuts in spending, though, in addition to
this.

MR. FLEISCHER: The President is going to continue to ask Congress
to hold the line on spending. The President has announced a series of
priorities which involve increases in spending for education, increases
in spending for homeland security, to fight bioterrorism, to provide
more money for first responders. All of those are the priorities that
the President has announced that he'll continue to work with the
Congress on.

And the Congress, as you know, is taking up the appropriation bill
that was undone from the last Congress, in the next two weeks. They've
already agreed on an aggregate cap of $750 bill for all domestic
discretionary spending for the 11 remaining appropriation bills. So
the President is encouraged by the fact that they have already agreed
to a cap that the administration supports for the upcoming
appropriation cycle for 2003.

Q British Foreign Secretary Jack Straw said earlier today that
the way he sees it, war with Iraq is less likely now than it was. Does
the White House agree with that assessment?

MR. FLEISCHER: Well, the President, as he said over the holidays,
remains very hopeful that peace can be pursued as a result of some of
the decisions Saddam Hussein has yet to make. And this is about
disarmament. And that's why the inspectors are there. They're going
about their jobs and they're doing their work, and the President
continues to hope that war can be averted.

Q So the buildup that we're witnessing now, particularly the
departure of the hospital ship Comfort today, is that posturing or is
that serious?

MR. FLEISCHER: I think the President has been very serious. And
hopefully, Saddam Hussein will get the message that the world
community, through the United Nations, has called on Saddam Hussein to
disarm, and as the President said, he will either disarm or the United
States will lead a coalition to disarm him. That's a serious message.
It's not a bluff. And perhaps as a result of it being such a serious
message, Saddam Hussein will indeed get that message and disarm
peacefully.

Q Back on the stimulus package, how does any of the benefits
that you outlined in the tax cuts, especially for the average American
family making $39,000 a year, does any of that come from cutting taxes
on dividends?

MR. FLEISCHER: The dividend tax -- first of all, I'm not going
to comment on anything specific to what the President may or may not
propose tomorrow. This is the President's announcement to make the
substantive points about it. I can share with you some of the
statistics and aggregate information about it.

Speaking generically on the question of a dividend cut, half of all
American households nowadays, in our modern economy, own stock through
either pensions, 401K plans, or other accounts. That means roughly 70
million Americans, a surge in Americans, own stock. More than 35
million Americans have dividend income. Of those 35 million Americans,
more than 10 million are senior citizens.

And so the President believes very much that people need to have
incentives for growth. He believes very much that we should help
people to plan for a secure future. Obviously, senior citizens rely
greatly on their income because they're no longer working; they rely
greatly on their income that comes from things like their investments.
And fortunately, for an increasing number of Americans, which does
increase continually year after year, a larger and larger number do
have income and resources coming from investments.

Q Isn't a lot of that already tax-free, though, through 401ks
and that kind of thing?

MR. FLEISCHER: The dividend income remains double-taxed.

Q Not if you have your -- if you're investing through a 401k,
though.

MR. FLEISCHER: The amount that you would have in there is
diminished as a result of it already being taxed once as profits of the
corporation are taxed. That's the source of the double-taxation on
dividend income.

Q But you aren't cutting that.

MR. FLEISCHER: I'm sorry? You'll have to show up at the speech
tomorrow to find out what the President is cutting.

Q So you dispute the notion that cutting taxes on dividends of
these 35 million Americans with dividend income, that most of them are
well-to-do or better off or well above the average, and what you're
really doing is helping --

MR. FLEISCHER: When you look at the statistics, more than half the
money from dividend taxation goes to seniors.

Q Rich seniors.

MR. FLEISCHER: Well, if you believe that all 10 million seniors I
just referenced are rich, then you believe that almost everybody in
America is rich. The President would like to see a nation in which
more and more people have opportunities to become successful. And
that's one of the reasons he feels so strongly that it is wrong to tax
people's future, that it is wrong to tax people's savings.

MR. FLEISCHER: The President has not put a period of time on
there. The President wants to continue to work with the international
community to make certain that the inspectors can do their job. And
that requires the compliance of Iraq with the United Nations Security
Council resolutions. Saddam Hussein's statements where he accused the
weapons inspectors of being -- of carrying out pure intelligence work
is an attempt to divert attention from the fact that Iraq still has not
shown signs that it will disarm itself of weapons of mass destruction.

Q You mentioned before that 35 million Americans receive
dividend income. The proposal, as we understand it, is going to
allocate something like $300 billion over 10 years, eliminating
taxation of dividends. Why couldn't $300 billion be put to better use
across a much wider array of Americans, rather than just those 35
million who receive dividend income? Never mind that only a small
portion of them get a large amount.

MR. FLEISCHER: Well, the President looks forward to having many
announcements that he'll be making. Not only what you're surmising the
President will describe tomorrow on the dividend side of the ledger,
but all income taxpayers pay income taxes. And the President looks
forward to addressing a series of ideas tomorrow that will help lower
taxes for all Americans, give a boost to the economy, give a boost to
growth. But keep in mind what I said -- the President does not think
it is right to tax savings and to penalize people who save, and the
President does not think it is right to penalize people who plan for
their future.

Q Ari, do you consider this to be a stimulus plan? Or is that
not a word you'd use? And how much of the cost of this will we see in
the current year?

MR. FLEISCHER: Well, the President views this plan as doing two
things: giving a short-term boost to the economy. The economy has
grown, but it's not grown as much as the President would like. And for
anybody who is unemployed, every little bit of growth in the economy
means fewer people will be unemployed. And so in very human terms,
every little bit of growth helps put somebody back at a job and puts
food on a table for a family that is suffering or going without, having
to make do by stretching budgets.

The President also wants to provide a more fundamental basis for
long-term growth so the economy's fundamentals remain solid and we can
have even more sustained growth at a higher rate for even longer
periods of time. So the President views this as a way to accomplish
both.

Q Can you say what percent is up front, the first year?

MR. FLEISCHER: All that will be available tomorrow when the
announcement is made.

MR. FLEISCHER: The President views the actions of the IAEA in
Vienna today as the appropriate course of action. When you take a look
at what they did and what they said today, they deplored in the
strongest terms Korea's unilateral acts preventing international
verification of their nonproliferation obligations. They called on
Korea to cooperate urgently with the IAEA, allowing them to reestablish
monitoring, and to verify all its nuclear material. The President
views this as the appropriate course of action.

Q But why is that? I mean, in light of the fact that North
Korea has broken its agreements before, I mean, why not bring it before
the U.N. Security Council at this time?

MR. FLEISCHER: Because what's happening here is you see the world
coming together. And the nations that were involved in this decision
today are very broad. It's not only China, Russia, South Korea, Japan
and the United States that are troubled by North Korea's unilateralist
actions. The nations that made up the board that voted in Vienna today
include Australia, Malaysia, Iran, Cuba. It takes a lot of work to get
condemned by Iran and Cuba, and North Korea has done it.

Q A quick follow-up on the tax cut issue. The figures that you
gave for the average tax cut size, is that just from the proposed
dividend tax, or are there other tax cuts mixed up with that?

MR. FLEISCHER: That's from the entirety of the President's
proposal tomorrow.

Q So that's not just from --

MR. FLEISCHER: From every piece of the proposal the President will
make tomorrow.

Q It includes additional income tax cuts?

MR. FLEISCHER: Comprehensive.

Q What percentage of the total stimulus is tax related, and
what percentage is other sorts of things, such as aid to the states and
extending unemployment benefits?

MR. FLEISCHER: The overwhelming amount is in the form of providing
tax relief to give a boost to the economy and to individuals.

Q If I could ask you on North Korea, there is a lot of talk, as
you know, of some sort of agreement by which we would -- led by the
South Koreans to try to get the U.S. back at the table with the North
Koreans. If, in fact, North Korea takes some step to back away from
its nuclear ambitions, is the U.S. prepared to sit down and have
talks? And secondly, is the U.S. prepared to offer any sort of
assurance about non-aggression and that sort of thing?

MR. FLEISCHER: Well, the President has repeatedly stated as
plainly as can be that the United States has no plans to invade or to
attack North Korea. So that's an often-made statement that should be
seen for what it is. And the President believes North Korea knows that
and they understand that. But we will continue to work with our allies
on a common approach to the problem that North Korea has created
through its unilateralist actions.

Q Is there something the North Koreans can do that would prompt
the U.S. to sit down and talk, which seems to be a key for them?

MR. FLEISCHER: Well, keep in mind, the United States has long
supported South Korea's engagement with North Korea. When you take a
look at what's happened, nations like Japan were engaging -- were
beginning engagement with North Korea. And as a result of North
Korea's actions, Japan examined what it was doing and has decided to
proceed at a different pace. So various nations continue to have
various levels of discussion with North Korea.

I want to point out that even while there were many conversations
-- in North Korea, North Korea was still breaking its word. So I don't
think the issue is whether or not North Korea is being talked to or not
talked to. The issue is North Korea breaking its word. They have
broken the word of the people they talked to, and they've broken their
word with the people they don't talk to. The one constant is that
North Korea breaks its word.

So from the American point of view, we very strongly support the
efforts to discuss with North Korea, through our friends in South Korea
and Japan; we always have. But the United States has made it clear
that North Korea knows what it needs to do, and it needs to come back
into international compliance, as the IAEA has urged them to do today
in the strongest of terms.

Q Is dialogue possible if they take some step backward on their
nuclear program?

MR. FLEISCHER: They know what they need to do, and they need to
come into international compliance.

Q Ari, a couple of questions on the numbers you've been using
today. When you -- first, when you were running down the list of
average tax relief, you started with 92 million, $1083, right?

MR. FLEISCHER: Correct.

Q Now, is that the overall number? And the ones that follow
it, do they include a lot of duplication? For example, the married
people in there --

MR. FLEISCHER: Clearly, there will be duplication in there.
Anytime you talk about married couples or families with children,
obviously there's duplication. And this is how the tax system works.
These are the aggregate numbers that are available through tax
researchers.

Q The one clean number is the 92 million?

MR. FLEISCHER: Well, I'm not sure what you mean by clean. They're
all accurate numbers.

Q Well, not duplicate.

MR. FLEISCHER: They're all, I think, helpful ways of understanding
the different phases that people are in their life and how they qualify
for tax relief. We have a very complicated tax code. Whereas, you
know under current law if you have children, you get a $600 child
credit. So therefore, you want to take a look at families with
children. But there are many people who pay income taxes who don't
have children. So they're also a category that you want to take a look
at.

But the overall number is that 92 million taxpayers would receive
on average a tax cut of $1,083 in 2003, based on everything that the
President will propose tomorrow.

Q And then on this -- the question of the dividend income,
the 35 million and the 10 million of those being seniors, there has
been some work by people who are not supportive of this plan --
demographic work -- and they conclude that, in fact, these are --
the vast, vast majority of these people are wealthy people. Do you
dispute that?

MR. FLEISCHER: Well, I think when you recognize that more than $10
million senior citizens receive dividend income --

Q Yes, but they say that, like, only 6 percent of them are
people -- are seniors in any kind of middle to lower income
brackets. And in fact, there are -- like, over 90 percent of them
are seniors who are living in our highest tax brackets, the
wealthiest.

MR. FLEISCHER: Again, I think that you'll be able -- tomorrow
when the President makes his proposals -- to see any data, and we'll
be happy to compare the data. But there's no question that we have
created a tax system in America where the lion's share of people who
pay income taxes -- let me put it this way -- many individual
Americans no longer pay income taxes. And so it's hard to give income
tax relief to people who do not pay income taxes.

What happens in America today, under our complicated tax system, is
that there are many millions of Americans who pay no income taxes, but
pay Social Security taxes and pay Medicare taxes. In return, they
receive Social Security and they receive Medicare. And that's why
there's been some discussion about the payroll tax. Both those
programs, of course, are dedicated and receive their fund from that
dedicated tax. And any effort to cut those taxes would mean that the
shortfall in those funds would only grow worse.

Q But so you don't dispute the fact that the vast majority of
these people in the dividend area, in fact, may be wealthy people?

MR. FLEISCHER: No, I do dispute that. I think very often the
critics of tax relief describe everybody in America as rich, in an
effort to stop tax relief. And I think that's been an old tactic by
people who wanted to raise taxes on the American people in the first
place.

Q So who do you describe as rich?

Q Ari, the President is going to propose additional tax cuts,
in part in order to stimulate what he's described as a sluggish
economy. While he's doing that, a number of states are contemplating
tax increases to offset huge budget deficits. If they're forced to go
that route, that would, to some degree, reverse the stimulative effects
of the federal tax cuts. Is the President planning to do anything to
help the states avoid that course of action?

MR. FLEISCHER: Well, again, it's not the President's business to
tell states how to conduct their affairs. The President obviously
believes that policies that reduce taxes create more growth, and that's
the policy he's pursuing on the federal level. There are also a number
of states that do not have shortfalls. And different states make
different decisions on spending. As I indicated earlier, spending is a
big contributor to budget deficits.

I'm not going to predict every course of action the President may
or may not take. But clearly, states would benefit tremendously from a
federal economy that is growing. The recession hurt everybody. It
hurt the federal government, it hurt state governments. That's the
problem with recessions, they hurt one and all. That's why the
President believes the answer is in growth. Growth, of course, is good
for the state governments.

Q But there's been talk of specific aid to states to help them
close some of the budget deficits that --

MR. FLEISCHER: As you know, I have not described any of the
substance the President may or may not announce tomorrow. I would just
suggest to you, some of the things I've been reading in the newspapers
are incorrect about things the President may or may not propose.

Q Like what? (Laughter.)

MR. FLEISCHER: If I told you, you wouldn't travel to Chicago and
give Chicago an economic stimulus by spending all that lunch money
there.

Q Ari, many people have come to the conclusion that the stock
market is still pretty much a bubble economy. We've seen how the
bubble has burst over the last few years. Many people feel that that
-- we have not seen the end of it. At the same time, you have, as was
indicated, many of the states which are facing deficits looking to the
federal government for aid, the only type of aid, of course, which
would come from some form of tax revenues. How do you counter the
criticism that you are helping through this tax relief to feed the
stock market bubble at the cost of the funds which otherwise would be
available for the necessary needs of the people suffering in the states
and in the country as a whole by cutting the tax revenues?

MR. FLEISCHER: Well, again, the President begins this with the
belief that the economy needs a boost. And if you take a look at the
statements made by many private-sector economists, they agree. The
economy is recovering from its recession. It is, indeed, growing. But
the President, because he wants to make sure that people looking for
work have more opportunity to find work, wants to put these proposals
in place so the economy grows even faster. And his conclusion is the
best way to do that is through the growth policies that low taxes
create.

Now, I'm very well aware that there are many people who think
taxing the American people once is not enough, and they want to tax the
American people twice. And the President believes that we need to
reduce taxes on working Americans, on the American people. And that's
what he's going to focus on tomorrow.

Q If I can follow on that. Traditionally, the successful
program for coming out of a recession or a depression are those taken
by Franklin Roosevelt during the 1930s, through a process of
infrastructural developments, TVA, these kind of programs; or in the
1960s where we came out of the Korean War recession of '58, '59,
Kennedy launched the space program which put the economy -- was also
an infrastructural investment program. Has the President considered
these type of things for bringing the physical economy back into motion
and thereby helping business through infrastructural --

MR. FLEISCHER: Yes, I would just urge to be at the speech tomorrow
and you'll see every detail the President is going to describe.

Q Ari, in a few minutes, Senator Clinton is going to hold a
news conference in which she's, once again, going to accuse the
President of foot-dragging on extending unemployment insurance
benefits. Any concern or regrets that the White House didn't do more
to try and get some kind of UI extension --

MR. FLEISCHER: The President is concerned and he regrets very much
that this was not able to get done last year. But finger-pointing is
not going to get anybody's unemployment extension carried out into
law. What's necessary is people to work well together. The reason it
didn't happen was because it was too big a divide last year between the
Senate approach and the House approach. And the President would very
much like to work with people to bridge the divide and not point
fingers at any one part of the divide.

MR. FLEISCHER: Well, one, the committee worked very hard to make
its decision about the holding of the convention. They did a
tremendous amount of research and there were a number of leading cities
that were considered. The President is very pleased and looks forward
to go to going to New York. I think that others more expert in
politics can tell you whether New York is winnable or not for the
President, but the President would very much like to, if he decides to
run for reelection, carry his campaign throughout the country. And
obviously, the President has a great many new supporters in New York.
And the President looks forward to continuing to talk about the
policies that he thinks are good not only for New York, but for the
entire nation. But New York, as well.

And my brother's apartment will be available to anybody who needs
it. (Laughter.)

Q Did he have to explain to his brother why New York over
Florida?

MR. FLEISCHER: As you know, the decision was made by the
Republican National Committee. It's not a decision that the President
makes, and the President supported the decision they made. He looks
forward to it.

Q Isn't it the assumption with the stimulus that in order for
it to have any short-term stimulative effect that people will actually
have to go out and spend this money? Isn't it a real possibility that
a lot of these people who are getting back $1,000, which is less than
they owe on their credit cards, that they will actually have to --
that they will actually go out and spend that money, and not use it to
just pay off debt?

MR. FLEISCHER: I think what you just heard, with all due respect,
is exactly why some American people look at Washington and say
Washington doesn't get it. A thousand dollars is a tremendous amount
of money to most Americans. It's not just an amount of money on
people's credit card -- that it's smaller than what's on their credit
card. That's real money. That's a lot of real money to a lot of
Americans. And the American people feel that it's their money and that
they're over-taxed. And I think that anybody who hears that they may
get $1,000 of their money back is very appreciative for it.

In terms of the mechanisms by which it can be delivered, I
indicated to you that the figure would receive on average a tax cut in
2003, so the variety of means available to the federal government to
make certain that money gets into people's hands so it can have a
stimulative effect as quickly as possible.

Q So you're not concerned that they're just going to use it to
pay off debt? You're confident people -- when they get this money
are going to go out on a spending spree?

MR. FLEISCHER: As I said, the President believes that the plan
he's going to announce tomorrow is good for the economy and good for
the country because it will do three things: One, it will encourage
consumer spending; two, it will promote investment; and three, it will
help the unemployed.

Q Ari, many people are wondering why we keep 37,000 U.S. troops
in South Korea where they've been for 50 years, and where South Koreans
are reportedly demonstrating with placards reading "American troops
out." And my question: Has the President given any consideration of
transferring these troops elsewhere, rather than allowing the
possibility of them being taken prisoner by a surprise attack by the 1
million-man North Korean army, possibly using nuclear weapons?

MR. FLEISCHER: Nothing like that has crossed my radar screen,
that's been brought to my attention by anybody inside the White House.
Obviously, there's a growing debate in print about this topic.

Q Reuters reports a senior administration official, who didn't'
want to be identified, saying that "we intend to continue supplying
food to North Korea, even though that government is spending its money
on nuclear development rather than food. And my question: Does the
President, or do you remember any incident in World War II that our
planes dropped food on either Nazi Germany or Imperial Japan?

MR. FLEISCHER: Let me tell you what our position is vis-a-vis food
and North Korea. The United States does not condition food aid on
political or security issues. We intend food aid to be viewed and seen
and received as a humanitarian gesture of the people of the United
States around the world. We intend to be responsive to the world food
program's appeal for North Korea, as we have in past years. We still
have concerns regarding monitoring and access in North Korea that need
to be addresses. It remains very important for North Korea to make
certain that the people who need the food receive the food.

Q Did you recall any instance where we did this over Germany or
Japan in the second world war?

MR. FLEISCHER: I wasn't alive then, Lester. So check --

Q But you have a good memory.

MR. FLEISCHER: How can you have a memory if you weren't alive back
then?

Q In terms of unemployment, to follow up on Ken's question, is
there any kind of outline of what kind of unemployment insurance the
President will want -- a number of weeks, that kind of thing? And
secondly, anything to specifically help out specific industries such as
airlines, et cetera?

MR. FLEISCHER: Here's the President's approach on unemployment
insurance. The President has called for unemployment insurance to be
extended and to do so retroactively to December 28th, so that people
who were cut off as a result of the impasse reached last year can get
the help that they need. The President wants to make certain that it
gets done.

And what has often happened in Washington is when people stake out
positions, either one side or another, as happened last year, there's
no room for compromise, no room for agreement, and therefore, people
who need help don't get the help. The President sees his role in this
as being the one who can bring the House and the Senate together to get
it done. The problem is the House and the Senate have been feuding,
and what they need is somebody who can step in quietly to help the
unemployed to get it done.

And that's what the President is going to do. He's going to work
very hard with the House and the Senate to help them to find a way to
help the unemployed who got cut off and who deserve this help. The
economy remains soft, and that's why the President thinks this is the
right course to take.

Q But any position does he have in terms of weeks?

MR. FLEISCHER: It's just as I said. The President is going to
work with both to bring them together to get an agreement.

Q If I could follow up to that, in a sense, the Democrats, who
are unveiling another economic stimulus proposal today, do believe that
extending unemployment benefits broadly for at least 26 more weeks is
the best way to stimulate the economy immediately. Would the President
agree with that? Is that the best way to immediately kick-start the
economy?

MR. FLEISCHER: Well, I think the fact of the matter is that
unemployment insurance needs to be seen as the President sees it, which
is a compassionate way to help people who have lost income, who rely on
the income to feed their families and to make ends meet in our
society. But by any equation, unemployment insurance itself is a very
small dollar amount and would not be seen as in and of itself a
stimulative part. It's a compassionate part and a necessary part of an
economic recovery program, and that's how the President views it.

MR. FLEISCHER: Well, the United States is providing them
information and we continue to provide them information. We strongly
support their efforts, it's in America's interests that they have the
intelligence, the equipment and the personnel to do the job that the
international community and the United Nations Security Council have
asked them to do.

As the inspectors' capability to secure and use intelligence
information has improved -- as, i.e., the size of their inspection
team has grown, their experience has deepened, their capabilities such
as additional helicopters has improved -- we'll be able to increase
our level of support. And that's what you're seeing happen now.

Much also still depends on Iraq, Iraq's willingness to comply.
Inspectors, even with the best of intelligence, met with a country like
Iraq that won't comply, still can confound the inspectors' ability to
do their job.

And one other piece, just on this issue is we continue to provide
increased intelligence information to the inspectors. The inspectors
are doing their very, very best. And the President is appreciative of
those efforts. But bear in mind the environment in which they find
themselves working. It is the Iraqis who prevent them from -- who
have put in place the hurdles that mean that they -- as you knew in
the past, bugging their rooms, monitoring their conversations. And so
there is also the issue of what information Iraq is trying to get as a
result of anything that could be conveyed. It's not as if it's just a
matter between the United States and the inspectors. Iraq's failure to
comply plays a role in this as well; otherwise information would end up
in Iraq's hands.

Q Can you prove that?

MR. FLEISCHER: Terry, I think you reported it yourselves
throughout the '90s about the fact that the inspectors rooms were
bugged and they don't have secure phones everywhere. That's why I
said --

Q It's based on historical record.

MR. FLEISCHER: Sure. And based on Iraqi patterns.

Q And we have definite proof?

MR. FLEISCHER: And just as -- hold on a moment, Helen -- as I
said, just as they're getting additional equipment, more resources,
more information is and will be provided. After all, why wouldn't we
provide it? We want them to have as much as they can to do their job.

Q If I could follow just a second. They have to have their
report in by the end of this month. And the administration is
confident that they've provided them with enough information that they
can have a full report on what the activities are in --

MR. FLEISCHER: Well, their ability to have a full report or not is
going to be directly dependent on what Iraq does, not what the United
States does. It's Iraq's compliance, it's Iraq's cooperation that
determines whether the inspectors have the means to do their jobs.

Q What means of comparison do you have though? If they've come
back and say they haven't found anything, what are you compare it to,
because there's no other --

MR. FLEISCHER: Well, let's wait and see what happens when they
come back.

MR. FLEISCHER: No, the White House has not received, to the best
that I've been told, any advance information on what the Democratic
Party or its leaders or its individuals will be offering this
afternoon. We look forward to hearing about it, we look forward to
seeing it. We hope that we will be able to work with Democrats in the
Congress to provide a stimulus to the economy.

Obviously, when the President's tax plan was passed in 2001, a
large number of Democrats joined with the President in supporting it.
In fact, you can already see there are many Democrats -- I should say
there are some Democrats -- who have already come out saying that
they believe that some of the proposals that were enacted in 2001
should be accelerated this year. So we'll see. There may be some
divisions among Democratic ranks. There may not be everybody in the
Democrat Party who supports the President's tax approach.
Nevertheless, the President will be on the hunt to look for Democrats
who will work with him to give the economy a boost.

Q One more. Do you expect the use of bases in Turkey and Saudi
Arabia if the U.N. does not approve military action against Saddam
Hussein?

MR. FLEISCHER: Anything dealing with operations or bases, as you
know, you need to check with DOD.

Q Thank you, and happy New Year.

MR. FLEISCHER: Happy New Year to you.

Q Thank you. The President said that as Commander-in-Chief, he
will get a smallpox vaccination. Has he gotten it yet? And did he
have any adverse reaction? Is he -- if he hasn't gotten it, when
will he?

MR. FLEISCHER: The President did receive it. He received it on
the Saturday right before Christmas. I don't recall what was the exact
date -- just prior for his departure for Camp David. And, no, the
President has not had any adverse reactions. At least not to the
smallpox vaccine. (Laughter.)

Q What?

MR. FLEISCHER: Lester, he occasionally has adverse reactions to
other things, Lester.

Q Ari, I wanted to say something else. I wanted to say today
is a very important day for Hispanics and especially for Hispanic
children. It's the day, like Santa Clause and the Three Kings Day and
it's the Santa Claus for all the Hispanic children all over. And so I
thought I wanted to say happy Three Kings Day.

MR. FLEISCHER: Thank you.

Q Ari, again, happy New Year. Only one question today. Indian
Ambassador to the U.S. -- the New Year he had a very high praise for
President Bush as fighting against terrorism. But he said there is
more room that we can do, India and the United States can work
together. And now also at the same time this week, I might be
attending a short conference in Delhi where Indian Americans are
gathering for security and terrorism conference, first ever called by
the government of India, recognizing the Indian Americans in the U.S.,
their contributions to both countries. My question is how President
Bush will address this conference if he's there, as far as Indian
Americans are concerned, and any message on --

MR. FLEISCHER: Yes, I don't have anything on my schedule
indicating that the President is attending that.

Q And any message from him, let's say for this conference, as
far as Indian Americans are concerned, together they're fighting
against terrorism and supporting America and for the relations between
the U.S. and India?

MR. FLEISCHER: The President's message to Indian Americans and to
all Americans is that we are one nation. We are united in the war
against terror. He appreciates the efforts of everybody in our broad
community to help our country to combat and to win the war on terror.
And he appreciates everybody who is serving in our Armed Forces and
everybody who is doing their part in our police and everywhere else to
keep America safe.

MR. FLEISCHER: No, I'm not telling what specific proposals he will
or will not have. That will be the President's business to announce
what's specific or not. I did say that the President's proposal
tomorrow will focus on three things. And the third thing, if you
recall I said, was there will be help for the unemployed. So I'm not
telling you what he's going to announce, but I'm telling you that he
will have something to say about helping the unemployed. I came very,
very close. (Laughter.)

Q And also the numbers that you gave earlier on benefits,
those are -- you may have said, those are for next year, the various
groups that would benefit from the tax cuts --

MR. FLEISCHER: Well, 2003 has arrived, so that's for this year.

Q It's for this year, 2003.

Q Can you just clear up one other point on those numbers? Is
that money that taxpayers would have had coming to them in 2004, but
moved up a year?

MR. FLEISCHER: It's a combination of factors. It's based on the
totality of the President's plan.

Q But how much of it was money that they would have --

MR. FLEISCHER: It includes some new proposals and it includes
other proposals that have already found substantial bipartisan support
in the Congress. And that could deal with calendar dates of those
proposals.

Q Do you know what percentage was already included in the tax
cut that is being moved forward?

MR. FLEISCHER: No.

Q Ari, as a result of the President's plan, do you have an
estimate on how much you think the economy will grow by and how much
the stock market will rise?

MR. FLEISCHER: I think it's impossible to predict any type of
stock market performance based on announcements out of Washington. And
I think private-sector forecasters may have information on growth. But
as I indicated earlier, whatever the percentage growth is, if you're
unemployed in America, every little bit helps to help people to find
their jobs.

Q Just one more question, do you have any plans yet for
briefing tomorrow? And would it be here, in Chicago, or en route?

MR. FLEISCHER: Probably a little bit of both. En route to Chicago
and then also we'll have some people stay back at the filing center to
answer questions following the speech.

Q Can you give me a list of convicted criminals on the White
House staff, other than Elliott Abrams?

MR. FLEISCHER: I'll go right to the convicted criminals division
and ask them to turn -- (Laughter.)

Q No, seriously -- why isn't being convicted of a criminal a
disqualifier for being on the White House staff?

MR. FLEISCHER: Russell, this is an issue that you like to repeat
every briefing. I refer you to the --

Q But you don't answer --

MR. FLEISCHER: -- repeat I gave you the third time you asked it,
which matched the second, which corresponded to the first.

Q A question on Venezuela, Ari. Is the White House following
the events of the last couple of weeks, especially the situation of the
oil company where this strike has affected the market -- the
international market of oil? And what do you think of the help that
the new President of Brazil has given to President Chavez?

MR. FLEISCHER: Well, the President's message remains one of
wanting to work for a peaceful resolution of the dispute in Venezuela
that focuses on democracy and on listening to the people of Venezuela.
The OAS efforts remain underway, and we continue to strongly support
the OAS and their efforts.

Q NBC News reported this morning that Saudi businessman Yassin
Qadi, whom the Bush administration has designated a global terrorist,
was actually a supporter of the President's and went to a Republican
fundraiser and asked how he could contribute something like a half
million dollars to the President's campaign. That fundraiser turned
him down because it was illegal. But did -- does his support or past
political support for the President cause you to question your decision
to designate him as a global terrorist?

MR. FLEISCHER: This is the first I've heard of it, so I'll have to
take a look at it.